WARSAW, May 27 (Reuters) - The Hungarian forint

firmed on Wednesday after the country's central bank

left rates on hold and as investors looked ahead to a potential

deal on releasing European Union funds.

The forint has been Central Europe's best-performing

currency this year due to investor optimism that the new

centre-right government of Prime Minister Peter Magyar can get

the cash released. It was frozen due to a dispute over

democratic standards under the previous administration.

On Saturday, Magyar said negotiations related to the funds

were "progressing well" and he was planning to sign a deal in

Brussels on Thursday to release them.

On Tuesday, Hungary's central bank left its base rate

unchanged at 6.25%, as expected, following a rise in global

energy prices and domestic fiscal risks, but noted a significant

improvement in the inflation outlook amid strong gains in the

forint.

The forint was 0.34% firmer against the euro at 355.30 at

0839 GMT.

"In our view, a persistent easing of risks, stabilisation of

the forint and yields at a favourable level could lead to a 25bp

interest rate cut in June, followed by one or two further cuts,"

ING said in a note.

"Although the market has room to price in more cuts at the

front of the curve, we do not think the June rate cut alone will

pose much of a threat to the forint and we remain bullish on FX

despite the dovish turn ... the EU funds story also continues

and we should see more details this Thursday."

Other currencies were mixed, with the Polish zloty

down 0.11% at 4.24 and the Czech crown down 0.05% at

24.277, while the Romanian leu was 0.11% firmer at

5.2355.

Benchmark 10-year Polish bond yields were 3 basis points

lower at 5.749% ahead of an auction at which the finance

ministry was expected to sell bonds worth 7 billion to 11

billion zlotys ($1.92 billion to 3.02 billion).

"After yields stalled near significant resistance levels

last week, we expect little change, with limited room for a

continuation of yesterday's downward trend during today's

session," Bank Millennium said in a note.

CEE MARKETS SNAPSHOT AT 1039 CET

CURRENCIES Latest Previou Daily Change

trade s close change in 2026

Czech 0

Hungary 00 0 %

Polish Romania %

Serbian 00 0 %

Note: daily change calculated from 1800 CET

STOCKS Latest Previou Daily Change

s close change in 2026

Prague 2573.8 2583.73 -0.38% -4.16%

8 00

Budapes 131407 130916. +0.38 +18.35

t .96 32 % %

Warsaw 9 % %

Buchare 30705. 30702.7 +0.01 +25.64

st 02 7 % %

BONDS Yield Yield Spread Daily

(bid) change vs change

Bund in

spread

Czech ps

2-year

Czech ps

5-year

Czech ps

10-year

Poland ps

Poland ps

Poland ps

FORWARD RATE 3x6 6x9 9x12 3M

AGREEMENTS interba

nk

Czech Poland Note: FRA quotes are for ask prices

($1 = 3.6395 zlotys)